WASHINGTON, Aug. 15 (Xinhua)-- The United States said
on Wednesday that it was not considering military action against Iran while
local mass media said that the Bush administration has decided to designate
Iran's elite Revolutionary Guard as a terrorist group.

"Military action is not being contemplated," though
no president should ever rule out the use of force, White House deputy press
secretary Dana Perino told reporters at Crawford Texas where President George W.
Bush is taking a vacation.

"No president should ever take that option off the
table, but diplomacy is what we are aiming towards and what we are working on in
terms of the UN Security Council," Perino said.

The spokeswoman made the remarks after the Washington
Post reported Wednesday that the White House has decided to designate Iran's
Revolutionary Guard Corps, the country's 125,000-strong elite military branch,
as a "specially designated global terrorist."

A U.S. government official, who asked not to be
identified, has confirmed the report.

The Bush administration has chosen to move against
the Revolutionary Guard Corps because of what U.S. officials have described as
its growing involvement in Iraq and Afghanistan as well as its support for
extremists throughout the Middle East, the Washington Post quoted unidentified
U.S. officials as reporting.

The decision follows congressional pressure on the
Bush administration to toughen its stance against Tehran, as well as U.S.
frustration with the ineffectiveness of UN resolutions against Iran's nuclear
program, the officials said.

The designation of the Revolutionary Guard will be
made under Executive Order 13224, which President George W. Bush signed two
weeks after the Sept. 11, 2001, attacks to obstruct terrorist funding.

The main goal of the new designation is to clamp down
on the Revolutionary Guard's vast business network, as well as on foreign
companies conducting business linked to the military unit and its personnel.

It authorizes the United States to identify
individuals, businesses, charities and extremist groups engaged in terrorist
activities.

The Revolutionary Guard would be the first national
military branch included on the list, U.S. officials -- a highly unusual move
because it is part of a government, rather than a typical non-state terrorist
organization.

It is unclear when the announcement will be made
formally, but U.S. officials said the move reflects escalating tensions between
Washington and Tehran over issues including Iraq and Iran's nuclear ambitions,
the report said.

Iran has been on the State Department's list of state
sponsors of terrorism since 1984, but in May 2007 the two countries began their
first formal one-on-one dialogue in 28 years with a meeting of diplomats in
Baghdad.